UPI: The Dawn of Digital Fintech Nirvana - UPSC Current Affairs
In today’s edition of our Current Affairs Dialog box we will discuss UPI: The Dawn of Digital Fintech Nirvana in detail.
Navigate through the article to get useful insights on the topic and enhance your UPSC preparation. Its relevance to the CSE syllabus is mentioned below:
For Prelims: Unified Payments Interface or the UPI, National Payments Corporation of India (NPCI), Immediate Payment Service (IMPS), Merchant Discount Rate (MDR), Virtual Payment Address (VPA)
For Mains: IT and Computers, Government Policies and Interventions, Human Resources, Science and Technology
The Unified Payments Interface or the UPI, has now processed, more than 40% of all retail digital payments (non-cash and non-paper payments) in India.
From the dawn of civilization, man has always accumulated and hoarded. However, the Unified Payment Interface (UPI) enables one to move around with an empty pocket. Comment.
About The Unified Payments Interface (UPI)
- UPI was launched in 2016.
- It is operated by the National Payments Corporation of India (NPCI), which was formed by the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA), in 2009.
- The main aim behind this initiative was to create a robust payment and settlement infrastructure.
- It operates on top of the Immediate Payment Service (IMPS) which was created by the NPCI for immediate fund transfers.
- Functioning of UPI:
- To use UPI, the bank account must be mapped to a Virtual Payment Address (VPA).
- The above step is essential for proper fund movement of a customer’s VPA to a target VPA, to complete the transaction.
- UPI does not involve a Merchant Discount Rate (MDR), a fee that the recipient bank collects from the merchant.
Also watch a related video on Consumer Price Index by Vivek Singh Sir, our faculty for Economy:
- Accepts transactions as small as one rupee.
- Absence of Merchant Discount Rate (MDR) makes it popular among small businesses or vendors.
- Smartphones are the only need for UPI transactions.
- Reduction of hassles and overheads for the bank, thus saving cost.
- Secure transactions, as it has a dual security layer, the mobile personal identification number (MPIN), and one more PIN for every UPI transaction.
- QR code scanning involves no risk of someone having tampered with a static QR code, thus a great boost to security and trust.
National Payments Corporation of India (NPCI) is an umbrella organization for operating retail payments and settlement systems in India.
It is an initiative of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment & Settlement Infrastructure in India.
It has been incorporated as a “Not for Profit” Company under the provisions of Section 25 of Companies Act 1956 (now Section 8 of Companies Act 2013), The Company is focused on bringing innovations by the use of technology for achieving greater efficiency in operations and widening the reach of payment systems.
Source: The Hindu
Download the PrepLadder app to study from India’s top UPSC faculty and transform your UPSC CSE preparation from the Beginner level to the Advanced level. You can also join our Telegram channel for UPSC coaching and to stay updated with the latest information about the UPSC exam.
Own Your Dream
Connect on Instagram
Important Topics of World History UPSC Mains 2022Aug 19 , 2022
Maternal Health Situation in India- UPSC Current AffairsAug 17 , 2022
Sri Lanka Economic Crisis- UPSC Current AffairsApr 13 , 2022
Fundamental Rights in the Indian Constitution- NCERT Notes UPSCMar 15 , 2022
UPSC CSE 2022 Application Form Released. Check Eligibility Criteria, How To Apply.Feb 02 , 2022
UPSC Exam Calendar 2022 Released. Check CSE DatesJan 04 , 2022
Explained: UPSC Syllabus and Exam Pattern 2021Aug 12 , 2021